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News ID: 7898
Publish Date : 26 November 2014 - 21:34

Minister: Pakistan Gas Deal Still Viable

VIENNA (Dispatches) -- Iran's oil minister said Wednesday plans to extend a natural gas pipeline to Pakistan were still on the table.

"Pakistan has signed a deal to import 760 million cubic meters of natural gas per day from Iran and by the beginning of 2015, it should start receiving this amount of gas according to agreement," Oil Minister Bijan Zanganeh said.
Once dubbed the Peace Pipeline, and including India as the terminal country, Iran has long held out its gas reserves as an opportunity for Eastern trading partners. Washington and its Western allies, however, have backed a rival project that would stretch from one of the world's largest natural gas fields in Turkmenistan through Afghanistan, Pakistan and India.
According to Zangeneh, a clause in the gas pipeline contract means Pakistan would pay at least $3 million to Iran for project delays.
The oil minister said Iran was willing to consider amending the country to facilitate the project's development.
"Whenever the Pakistanis construct their domestic gas pipeline network, Iran would start gas delivery to its eastern neighbor," he said.
Zanganeh said Iran is committed to its gas contract with Pakistan, urging the country to show the same commitment.
"Iran has almost completed the establishment of the Iran-Pakistan pipeline in its territory and is ready to export gas to Pakistan as soon as the country builds its own section of the pipeline,” he said.
The minister noted that Iran’s gas output during March 21 - November 21, 2014 has increased by 100 mcm year-on-year and amounted to more than 600 mcm per day.
Islamabad would initially receive 20 mcm of gas per day after completing the remaining section of the Iran-Pakistan pipeline in its territory.
The gas contract signed between Tehran and Islamabad requires the Pakistani government to pay $3 million worth of compensation to Iran for each day of delay as of the beginning of 2015.
Following the Iranian oil ministry’s ultimatums to Pakistan, demanding the country to complete the project on time, Pakistani Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi travelled to Iran to extend the deadline. Earlier, Deputy Oil Minister Ali Majedi said that Iran had spent $2 billion on the establishment of the pipeline and would invest another $1 billion to complete the project.
Majedi noted that even if the Pakistani government were to appoint the project's contractor right then, it would only be able to complete the project in about four years.